WestRock to acquire remaining interest in Grupo Gondi

WestRock Co., an Atlanta-based containerboard and packaging producer, has announced it has entered into an agreement to acquire the remaining interest in Grupo Gondi for $970 million, plus the assumption of debt. The estimated enterprise value is $1.763 billion.

WestRock says that upon completion of the transaction, the company will further enhance its position in the growing Latin American containerboard, paperboard and consumer and corrugated packaging markets, as Grupo Gondi operates four paper mills, nine corrugated packaging plants and six high graphic plants throughout Mexico. The company adds that the tuck-in acquisition will provide it further geographic and end-market diversification as well as position it to continue to grow in what it calls an "attractive Latin American market."

"As onshoring continues to grow in the region, WestRock will be well positioned to meet this growing demand with fully integrated operations in Mexico," WestRock CEO David B. Sewell says. "We will also have expanded capabilities to serve customers across many geographies, driving additional productivity and cost savings."

Grupo Gondi board Chairman and President Alejandro González Cimadevilla says, "WestRock and Grupo Gondi have been great joint venture (JV) partners over the past six years, working together to provide outstanding service and innovation for our customers. Becoming part of WestRock, with its scale, geographic footprint and customer-focused solutions will further enhance our ability to provide complete packaging solutions for our customers."

According to WestRock, it currently owns 32.3 percent of Grupo Gondi after the companies formed a JV in 2016 combining their paper and packaging operations in Mexico. This transaction is expected to close by the end of the year will secure the remaining 67.7 percent. Grupo Gondi says its 2022 earnings before interest, taxes, depreciation and amortization will be approximately $200 million to $210 million, and WestRock says it expects to achieve an incremental $60 million in annual synergies by Year 3 following the closing.

"When we complete this transaction, Grupo Gondi will continue to excel as part of WestRock," Grupo Gondi CEO Eduardo Posada says. "I look forward to joining the WestRock team and serving our customers with the expanded capabilities and reach of WestRock."